Ramazan inflation: what we can do

Published: July 31, 2010
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Ramazan usually sees a rise in the prices of everyday commodities part of the common man's basket of purchases.

The Federal Bureau of Statistics (FBS) reported that the increase in the prices of perishable food items rose by 20.76%, that is right after the increase of 16.36% in the prices of electricity and fuel over the last year (period: July – June 2010).  The average inflation in food prices is 14.48% and inflation in non-perishable items lies at 13.64%.

The figures mentioned above are a reflection of the yearly increase in prices but let us see how prices are indicating that the holy month of Ramazan is coming. A week ago a national business newspaper conducted an on field survey exploring some realities about the rise in market prices of commodities that count in the basket of a common man one month before Ramazan 2010.

As per the survey the price of gram flour (basin) has increased from PKR 60 to 70 per kilogramme. The price of sugar has increased from PKR 60 to 70. The price of Dalda ghee rose to PKR 725 from 680/5kg. The price of tomato has risen to PKR 40 from 25/kg. The price of onion has risen to PKR 35 from 25/kg. The price of mango has risen to PKR 70 from PKR 50/kg. All items that will be in demand in the month of Ramazan are also seeing a rise in prices.

I will stop here because this is not something that you cannot witness when you go to the markets. This situation is nothing but a dilemma for our national planning over commodity prices and their availability. I know people expect us to write solutions of national problems. But what is the solution? If sugar is in stock at the mills, get it out and if it is not available buy it from the international market where it is even cheaper once duties shall be exempted. The same strategy goes for all other matters.

Even though this is not part of this topic, I remember when our ministers said a month ago that the electricity crisis is not because of the government’s mismanagement. They quoted it as an outcome of the natural shortage of water in our reservoirs. .

Ramazan is a holy month. It is a pure blessing of Allah but the blessing is being ruined by the people of this world. What can we say to the government that mismanages? The one who sells over-priced dresses on Eidul Fitar? Everyone is chasing higher earnings.

Many poor people in the country who cannot even make ends meet. People in the country who fast and after breaking their fast they remain without food. I know it is difficult to absorb but it is not solely the government that hurts them, we are also responsible in many regards.

Despite our complaints about inflation, many of us will spend thousands on Eid preparations. In a city where a person buys a dress of Rs5,000-20,000 for Eid, we have some families that need the same amount to manage their month on bare minimum standards. We can say that we equally give 2.5% Zakat so we have a right to do so, but ask your heart, can we really?

I am not talking about the measures the government can take to control inflation but let me talk about my responsibility. Let me talk about your responsibility. Believe me, the happiness of wearing an expensive dress, shoes, bangles etc is not more than feeding people in their stressed economic situations. It is far better when it is the month of Ramazan. You can go to the market and buy an expensive kurta for Alwida Juma and Eid prayer but God can hear you in the simplest basic getup.

Ramazan is approaching. Many of us with plans for Ramazan and Eid have to sit and think. Can we expect in today’s age that our government can do something to seriously control inflation? Can we expect anything but severe effects on prices when we see our crops ruined by the floods? So it is time to act with a lot of responsibility.

Everyone knows his buying power. Get together, cut your budgets in Ramazan and Eid and make a pool of money within your lanes, localities that can work for those who are deprived of the basics. This is the solution in hand. I am sorry to many of my readers who expect an economic or business solution from researchers like me. With just two weeks to go before Ramazan I just have an individual moral solution of this problem. As far as the government goes, I am not suggesting anything to them. They are not worthy of it.

saqib.omer.saeed

Saqib Omer Saeed

A financial researcher, analyst and adjunct faculty in CBM, SZABIST, BIZTEK & University of Karachi and blogs at www.bizomer.com

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • http://www.facebook.com/pracker S. Ali Raza

    Absolutely right! We are hardly an Islamic Republic, when it comes to service and administration. I highly recommend the “Fazool Kharchi’s” to view this video http://www.facebook.com/video/video.php?v=136697536356272&ref=mfRecommend

  • http://sadaf-fayyaz.blogspot.com/ SadafFayyaz

    very good post……and solid oneRecommend

  • http://www.alphaza.blogspot.com Murtaza Ali Jafri

    ….So your solution is for every neighborhood to cut their expenditure and pooling together their money into a fund ad then distributing it.

    Wishful thinking much?

    oh well, at least your not advocating the government stepping in like everyone else.

    oh btw, the solution is alot easier. Allow for food to be imported, all of these items are sold higher locally as compared to international prices. Force your local subsidized farmers to compete instead of benefiting from hoarding. Contrary to popular belief, it’s not a supply and demand problem. If you had this prices would be much lower. If the farmers cry how they can’t compete, then they should be told that they should start. The gravy train is over.Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    Thanks Ali, Sadaf and Murtuza for your precious comments.
    @ Murtuza: It is not a strategic solution but what I am seeing is simply: with 10 plus days remaining in Ramadan we can not expect strategic moves by the government as per the regression of their performances. Even, if you would know that ECC announced to sell Sugar @ PKR 55/kg on Utility stores as they allowed to import 375k tons of sugar from Int’l Market. But what this 375k tons and Utility stores means, we all know very well.

    The way we liberally priced commodities for farmers in last years it looks impossible to maintain the price limits in desired range. Absence of market mechanism and imbalance in pricing can not be resolved within days. We need to enforce a free market culture with regulators eyes on uneven practices in pricing and stockings. Even trading companies in Pakistan that can import items on cut prices are not large in numbers [as per the size of our economy]. If we can research product locations with differential prices so our trading companies can do a lot better in the country of 180 million people the same we can do in outward transactions to regional and countries across the world.

    You have pointed a really good point when you say that farmers must have to know that they now have to compete. I have written a detailed post a couple of week before on Agriculture & Commodity management and addressed the same issues. But again for Ramadan 2010 with disasters prevailing on our ground what we can ask from the government that need a lot of time to understand to know what to do. Literally we can not mobilize import of all items that matters for Ramadan in this limited time so we have to make this WISHFUL THINKING a reality for the people who are suffering and deprived around us. Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    By the way I also have one question from everyone. Why don’t we think about venture capital in agriculture? Last year some of my clients invested in agriculture by making the pool of money that buy a land and allow two farmers family to live on it and cultivate. Even farmers are happy that they got finance in form of private equity and as per the price mechanism of market the investors got handy returns [due to hedged prices of wheat etc.]. It is we who are more interested in stock exchange, CNG Pumps and other businesses but we can really play a role to boost our agriculture by providing a little better life style to farmers who are approximately crushed under feudalism. Yes the task is difficult because of the political culture in our rural areas but it is time to do difficult things Isn’t it? It is again a dream of Corporate Agriculture, again difficult with pros and cons but not impossible. What do you say folks? Recommend

  • Amar Khan

    again a timely article from your side. bravo!!!Recommend

  • Bilal Ali Qureshi

    Well as far as Mr.Saqib Umer has said regarding the solution its pretty understandable. If we read Quran it gives the complete code of life which also included economical and social aspect. In fact this is one of the most important aspect because these were and are the most sensitive issue in every time of life that has been there.
    Today world is speaking of corporate social responsibilities, role of Govt in a welfare society. Unfortunately, in Pakistan we still cannot expect from the government or at a large scale from a corporate world. The change is needed but its going to be us the youth and the nation’s young breed who has to bring it in from our own selves first and its shine would be reflected among others and God magnifies the shine of a good deed if its committed sincerely. Lets join our hands together and start from our own selves and make a resolution which can be a small thing for us like not spending more on clothes this eid and instead help others and bring smiles on those faces who have not smiled since long time.Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    Great Bilal: I never write for just writing, I write for mobilization. When I wrote it I decided something for myself and now it is up to the main stream youth to mobilize. People like you who are young can network the cause and go on. Be a leader of small groups of friends, cut as maximum as you can from your budgets for Eid and Ramadan and find places where happiness needs to be injected. Yes we can! little or big doesn’t matter. It can be a first block of a new Pakistan. I hope people like us can visit poverty affected areas in the city and sit with the people [better break our fasts with them even] to show them that don’t worry a new breed of leadership is in making and we will try our heart out to solve your problems as maximum as we can, in fact we have own those as our problems. Enough is the time to post our problems and talking about it. It is a time for solutions and if anyone can bring it are we. I know people can say that what can be changed from these efforts but believe me it shall a biggest change. We have to do this time for Ramadan, later for education; then for the top level to govern this country! I except those 55% who are 25 & below today shall turn out to be the power of thinking and implementation once they will reach 35. In next ten years we have to network for the best of the causes and then for the biggest deals for the progress of this very beloved country. Let us reject to live as a third world country. Let stand together against all inside and out abusers of our country and make it what it deserved to be, not with words but with class performances and I am sure we will InshaAllah.Recommend

  • Hina

    I was speaking with my Nani yesterday and she mentioned how before the partition, the Hindu vendors would lower their prices out of respect for Ramadan. It’s sad that the opposite is happening in the Islamic Republic of Pakistan. Recommend

  • amina abbasi

    YES SIR INDEED THIS IS TRUE AND AS BEING A HUMAN WE HAVE TO BECOME VERY ACTIVE IN THIS REGARD AND THIS IS OUR DUTY.INSHALLAHTALA AND MAY ALLAHTALA SHOWER HIS CHOICEST BLESSING UPON YOU FOR SUCH THOUGHT PROVOKING MESSEGES Aameen and to some extent we can overcome this issue by condemning to buy such commoditites that are subsitute goods and we can easily manage without using such commodities in Ramzan. Recommend

  • http://sadaf-fayyaz.blogspot.com/ SadafFayyaz

    Our economic model would never support deflation….:(Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    @ Hina. Your Nani is absolutely right. Even many things shall change for good in Pakistan InshaAllah. Covenent; again our awakening and mobilization.

    @ Sadaf. Absolutely right but real model would have to be based on massive utilization of vital resources on the land. Once we get done with it then inflation rate of 15% can be bearable but today the lack of economic planning and absence of walfare state causes inflation to turn as evil. Sometimes inflation become prerequiste of progress but this is not the case on ground today because this inflation is not powering progress and balance distribution of income or specific factor’s pricing.Recommend

  • http://www.bizomer.com Saqib Omer Saeed

    Thanks Amina. Go for all goods that counts….Recommend

  • arif Rehman

    Sir, I’ve observed tht u always raise issues which are realy issues with nation as whole.
    sir, i totally agree with with ur article abt ramzan pricing problem with us and prodigality of rich people.
    however, basically i liked ur tht comment in which u advised the people to divert from investing the money in agriculture rather than investing in stock.
    in this regard, i can logically prove that investing in agri. is quite better option than investing in stock from return on money point of view.Recommend